There was no significant impact on the performance of niche category smokeless tobacco, e-vapour products and heated tobacco by the emergence of COVID-19 in Pakistan in 2020, with current value sales continuing to record double-digit growth. Its ongoing impressive performance was driven by e-vapour products, which largely appeal to urban residents, and those consumers looking for a way to reduce their consumption of cigarettes or as an aid to quitting altogether.
E-vapour products has experienced increasing popularity in the major cities of the country including Karachi, Islamabad and Lahore, with growing penetration of this product amongst young urban adults: cigarette smokers who can afford more expensive alternatives are increasingly switching to vaping for perceived health reasons, while others have adopted vaping out of curiosity and aspirational factors. These early adopters, however, dominated the market in 2020 and contributed the most to stronger sales.
E-vapour products remained a highly fragmented competitive landscape in 2020, led by Shenzhen IVPS Technology Co Ltd which also leads the larger value category of open vaping systems through its SMOK brand, ahead of its closest rivals Shenzhen Smoore Technology Co Ltd and Shenzhen Joye Technology Co Ltd with their respective brands Vaporesso and Joyetech. The players retained their leadership largely due to their reputation for quality and better distribution.
Population growth over the forecast period and an improving economy is likely to see new users continue to enter e-vapour products, resulting in further impressive value growth rates (at constant 2020 prices). Non cig-a-like cartridges under closed vaping systems and e-liquids under open vaping systems are likely to see marginally stronger growth due to repeat sales compared to tanks which are more of a one-off investment.
Despite some negative media reports related to the possible long-term effects of using e-vapour products, consumer sentiment towards the category is likely to remain fairly positive. This is due to a greater move away from traditional cigarettes by urban consumers towards e-vapour products as an alternative method which is also perceived to be more socially acceptable.
E-commerce is expected to continue to grow as a viable alternative distribution channel for e-vapour products in the country over the forecast period. Convenience drives this channel through home delivery, especially among urban tech-savvy younger adults.
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This report originates from Passport, our Smokeless Tobacco and Vapour Products research and analysis database.
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